California CA Schedule 540NR Issue

[raluaces]

Hi,

Writing in because I am having an issue with my California Tax return. On my return the Schedule CA  540NR does not have line 4 filled out "I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move" despite me answering the questions which indicated that I became a California non resident in 2019.

Answers for my residency interview:

Did you become a California resident during 2019? No

Did you become a California nonresident during 2019? Yes

Were you a California nonresident during all of 2019? No

Were you a California resident before 2019? Yes

Did you enter California before 2019? Yes

Did you leave California before 2019? No

It could be assumed that answering yes to the second question would result in it prompting to report the date of move and new state for line 4 on CA 540NR however it does not and this line is empty when I preview the full return prior to filing.

I believe this is a serious bug that will impact my return if I file it as is. However I have had no traction reaching out to Intuit via any other means. Speaking over the phone got me nowhere other than reps reassuring me they guarantee accuracy. 

This is INSANE, because if you reference the instructions for Schedule CA 540NR is is extremely clear that line 4 in my case MUST be filled out.

I have already paid for their state product. If I knew such a serious discrepancy would occur I would have filed on my own and reduced the hassle experienced.

Is there any other avenue for reporting what seems to be a very serious bug in their CA return?

[arun]

Hi @raluaces, 

I am facing the same issue. (you have explained the problem clearly in your post. For your reference, here is my  discussion on this https://ttlc.intuit.com/community/state-taxes/discussion/re-california-non-residency-status-wrongly-... )

@TomD8atleast helped me fix some of the issue. After filling in correct info in Personal section of TT, atleast i am being treated as part-resident. In case u have not taken care of this and not filed yet, you can get this fixed.

Regarding the 540NR Schedule CA, line items 4 and 5 - the problem still remains for me...as you have pointed out before.

[d7g]

Hi

I have this exact same problem. I was a full-year resident of California in 2020 and a part-year resident in 2021. I moved from California to Florida on 03/30/2021.

I filled in the answers to the questions exactly as shown in the original question. Turbotax incorrectly classifies me as a non-resident for the whole year and then throws an error saying I need to enter a state for line 5 instead of filling in line 4:

Without fixing this error I am not able to file!

[d7g]

*See above*

[TomD8]

I think it's a question of semantics and definitions.  A taxpayer who changes his state of domicile in 2021 becomes a part-year resident of both states for that year.  He does not become a non-resident of CA - unless he has income from CA sources after the move.

For tax purposes, a non-resident is a person who is domiciled in one state, but who has income from another, non-resident state.  Example: a resident of Oregon who works across the border in CA.  Such a person files taxes as a non-resident of CA and a resident of OR.  

This reference has a detailed explanation of California's residency rules:

https://www.ftb.ca.gov/forms/2021/2021-1031-publication.pdf

[d7g]

I permanently left CA on March 30, 2021

Are you saying I should file as CA resident and pay taxes on worldwide income to CA?

Or are you saying I should file as non-resident and not get the Other State Tax credit for the income that was taxed by NY (because my employer was located in NY while I worked remotely while I resided in CA until March 30)

In each situation I end up paying extra $10,000 to CA, whereas if I file 540NR and tick the part-year resident box I save the $10K in taxes.

The California government official guide says:

Example 5 – You receive and accept a permanent job
offer in Spain. You and your spouse/RDP sell your home
in California, pack all of your possessions and move to
Spain on May 5, 2021, with your children. You lease an
apartment and enroll your children in school in Spain. You
obtain a driver’s license from Spain and make numerous
social connections in your new home. You have no
intention of returning to California.

Determination: You are a part-year resident. Through
May 4, 2021, you were a California resident. On
May 5, 2021, you became a nonresident. All your income
while you were a resident is taxable by California. While
you are a nonresident, only income from California
sources is taxable by California.

[TomD8]

If you permanently left CA in 2021, you file as a part-year resident of CA.

if you received income from NY while you were a CA resident, you would file as a non-resident of NY and claim an other state credit on your CA return for the taxes paid to NY on that income.

[kayyy]

I'm facing the exact same issue. In 540NR (Schedule CA) , for the following question, TT is leaving it blank rather than marking my date of move.  "4. I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move)"

This is a serious bug. Tried talking to the reps for an hour and still wasn't able to get it resolved.

[onesmallspeck]

Hi,

Was this eventually resolved? I am filing my taxes currently and see the same bug. Schedule 540NR isn't filled completely.

i.e this is left blank, even though I have specified I have moved to a different country in 2023.

I became a CA nonresident (enter new state of residence and date (mm/dd/yyyy) of move)

[MonikaK1]

If you were a part-year resident of California in 2023, you should file a part-year resident California return.

As a part-year resident, you pay tax on:

• All worldwide income received while a California resident
• Income from California sources while you were a nonresident

See this California webpage for more information.

TurboTax should complete the correct forms, depending on your entries. The California interview allows you to make adjustments for income that shouldn't be taxed on your California return.